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S&P, Nasdaq higher on vaccine hopes, improving economic data

(Reuters) – The S&P 500 and Nasdaq rose on Wednesday as rising hopes of a COVID-19 vaccine offset fears of another round of lockdowns following a record surge in coronavirus cases in the United States.

A COVID-19 vaccine developed by Pfizer Inc and German biotech firm BioNTech showed promise and was found to be well tolerated in early-stage human trial, the companies said.

Pfizer’s shares rose 4.8% on the news, one of the biggest boost to the S&P 500 index, while BioNTech gained 3%, helping improve the mood on Wall Street after the United States registered 47,000 new coronavirus cases on Tuesday, the biggest one-day spike since the start of the pandemic.

Updates on the progress in various COVID-19 vaccine programs are being closely watched by investors, and have been partly responsible for Wall Street’s recent rally. The S&P 500 closed its best quarter since 1998 on Tuesday.

The market in general has reacted positively to these bits of news as they are all tied to the COVID situation, said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey. “The COVID-19 is the linchpin to the market right now.”

The S&P 500 on Tuesday secured its biggest quarterly percentage gain in more than two decades fueled by unprecedented levels of fiscal and monetary stimulus.

Investors have also focused on signs of an economic recovery with the easing of coronavirus-induced lockdowns. Data on Wednesday showed a slump in global manufacturing was easing in June, with U.S. figures hitting their highest level in more than a year.

The Institute for Supply Management (ISM) said its index of national factory activity jumped to a reading of 52.6 last month from 43.1 in May, ending three straight months of contraction, or readings below 50.

On Thursday, all eyes will be on the Labor Department’s nonfarm payrolls report.

“The manufacturing number adds a boost to investor confidence. And now the market is positioning itself in anticipation for tomorrow’s numbers,” Bakhos added.

The ADP National Employment Report on Wednesday showed U.S. private payrolls increased by 2.369 million jobs, but still less than expected in June.

At 11:43 a.m. ET the Dow Jones Industrial Average was down 19.88 points, or 0.08%, at 25,793.00, the S&P 500 was up 8.47 points, or 0.27%, at 3,108.76 and the Nasdaq Composite was up 56.63 points, or 0.56%, at 10,115.39.

Battered cruise line operators Norwegian Cruise Line Holdings Inc, Royal Caribbean Cruises Ltd and Carnival Corp rose between 3.6% and 6.0%.

Drugmaker Amgen Inc rose 5% after a federal appeals court upheld two patents for the drugmaker’s multibillion-dollar rheumatoid arthritis drug Enbrel.

FedEx Corp jumped 14.3% after posting better-than-expected quarterly profit and revenue, helped by a surge in pandemic-fueled home deliveries.

Declining issues nearly matched advancers on the NYSE and outnumbered them 1.46-to-1 on the Nasdaq.

The S&P index recorded 13 new 52-week highs and no new low, while the Nasdaq recorded 64 new highs and eight new lows.

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Wall Street gains on vaccine hopes, improving economic data

(Reuters) – Wall Street opened higher on Wednesday as rising hopes of a COVID-19 vaccine reversed premarket losses, overshadowing fears of another round of lockdowns following a record surge in coronavirus cases in the United States.

A COVID-19 vaccine developed by Pfizer Inc and German biotech firm BioNTech showed promise and was found to be well tolerated in early-stage human trials.

Pfizer’s shares jumped 4.1% on the news, while BioNTech gained 3%, helping improve the mood on Wall Street after the United States registered 47,000 new coronavirus cases on Tuesday, the biggest one-day spike since the start of the pandemic.

Updates on the progress in various COVID-19 vaccine programs are being closely watched by investors, and have been partly responsible for Wall Street’s recent rally. The S&P 500 closed its best quarter since 1998 on Tuesday.

Investors have also focused on signs of an economic recovery with the easing of coronavirus-induced lockdowns. Data on Wednesday showed that a slump in global manufacturing was easing in June, with U.S. figures hitting their highest level in more than a year.

The Institute for Supply Management (ISM) said its index of national factory activity jumped to a reading of 52.6 last month from 43.1 in May, ending three straight months of contraction.

On Thursday, all eyes will be on the Labor Department’s nonfarm payrolls report.

At 10:17 a.m. ET, the Dow Jones Industrial Average was up 113.35 points, or 0.44%, at 25,926.23, the S&P 500 was up 16.78 points, or 0.54%, at 3,117.07. The Nasdaq Composite was up 40.39 points, or 0.40%, at 10,099.15.

Battered cruise line operators Norwegian Cruise Line Holdings Inc, Royal Caribbean Cruises Ltd and Carnival Corp rose between 3.6% and 6%.

Macy’s Inc edged up 1.7% after it reported a staggering $3.58 billion quarterly loss, led by a $3 billion impairment charge due to COVID-19 induced-store shutdowns.

FedEx Corp jumped 16.0% after posting better-than-expected quarterly profit and revenue, helped by a surge in pandemic-fueled home deliveries.

Advancing issues outnumbered decliners by a 2.76-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.39-to-1 ratio on the Nasdaq.

The S&P index recorded 7 new 52-week highs and no new lows, while the Nasdaq recorded 48 new highs and 6 new lows.

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Wall Street set for lower open after strong quarterly rebound

(Reuters) – Wall Street was set to open lower on Tuesday as coronavirus-related worries and simmering U.S.-China tensions weighed on sentiment at the end of what is expected to be the S&P 500’s best quarter since 1998.

The benchmark index has rebounded about 18% since April on a raft of fiscal and monetary stimulus and the easing of restrictions, but is still down about 5% on the year as a resurgence in virus cases fuels fears of a new round of lockdowns.

With California and Texas marking a record spike in cases on Monday, investors are counting on more stimulus to shore up the domestic economy.

“While traders remain curiously cautious waiting for the next catalyst, they are also keeping risk on a short leash into the long weekend,” said Stephen Innes, markets strategist at AxiCorp.

“COVID-19 de-risking playbooks are still in play and investors are not aggressively buying dips while booking profit quickly.”

Federal Reserve Chair Jerome Powell, who is due to testify before the U.S. House of Representatives Financial Services Committee at 12:30 p.m. ET, said in prepared remarks that the outlook for the world’s biggest economy was “extraordinarily uncertain”.

Sino-U.S. tensions are heating up again with Washington beginning to eliminate Hong Kong’s special status under U.S. law in response to China’s national security law for the territory. China’s parliament passed the legislation on Tuesday and the country said it would retaliate.

“If the environment between the United States and China continues to deteriorate, the market is not going to be happy, but because very little has been known about what’s going on with those new laws, it’s not having much of an impact yet,” said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York.

Analysts also warned of increased volatility as traders rebalance their portfolios at the end of the quarter.

Meanwhile, kicking off a data-heavy week for Wall Street, consumer confidence is expected to have climbed to 91.8 in June from 86.6 in May. Data on manufacturing activity and employment are due on Wednesday and Thursday.

At 8:34 a.m. ET, Dow e-minis 1YMcv1 were down 127 points, or 0.50%, S&P 500 e-minis EScv1 were down 11 points, or 0.36% and Nasdaq 100 e-minis NQcv1 were down 26 points, or 0.26%.

In premarket moves, Boeing Co (BA.N) tumbled 3.1% after Norwegian Air (NWC.OL) canceled orders for 97 aircraft and said it would claim compensation.

Micron Technology Inc (MU.O) jumped 5.5% as it forecast higher-than-expected current-quarter revenue on strong demand for its chips that power notebooks and data centers.

Uber Technologies Inc (UBER.N) rose 3.8% after reports said the ride-hailing services company was in talks to buy food-delivery app Postmates.

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Wall Street ends higher on Boeing bump, stimulus eyed

NEW YORK (Reuters) – Wall Street stocks closed higher on Monday and the S&P 500 was poised to clinch its biggest quarterly percentage gain since 1998 as investors hoped for a stimulus-backed economic rebound, while a surge in Boeing shares helped boost the blue-chip Dow.

The planemaker’s (BA.N) shares jumped more than 14% after a 737 MAX took off on Monday from a Seattle-area airport on the first day of certification flight testing with U.S. Federal Aviation Administration and company test pilots, a crucial moment in Boeing’s worst-ever crisis.

A spike in virus infections in Southern and Western states last week sent the S&P 500 down nearly 3%, but the threat of a deeper-than-feared recession has led investors to expect more stimulus measures from the Federal Reserve or Congress.

But the sting of rising infections was blunted by the pricing of the antiviral drug remdesivir, which has been shown to alter the course of COVID-19, by Gilead Sciences (GILD.O). The company also agreed to send nearly all of its supply of the drug to the United States over the next three months.

While the S&P 500 is up more than 17% for the quarter, the index is down slightly for the month, as stocks have been buffeted by signs of progress in battling the coronavirus and a recent resurgence in cases.

“For all the up, for all the down, volatility isn’t going anywhere,” said Willie Delwiche, investment strategist at Baird in Milwaukee. “Maybe that is the lesson of June, these one-day moves seem impressive but you string 20 of them together and you’ve got nothing.”

The Dow Jones Industrial Average .DJI rose 580.25 points, or 2.32%, to 25,595.8, the S&P 500 .SPX gained 44.19 points, or 1.47%, to 3,053.24 and the Nasdaq Composite .IXIC added 116.93 points, or 1.2%, to 9,874.15.

Each of the 11 major S&P sectors was in positive territory, led by industrial .SPLRCI stocks.

The benchmark S&P 500 .SPX has rebounded about 36% from its March 23 closing low. Monday’s gains pushed the index above its 200-day moving average, a technical support level it had fallen through with last week’s decline.

Data on Monday showed contracts to buy previously owned homes rebounded by the most on record in May, suggesting the housing market was starting to turn around. Later this week, investors will focus on employment and consumer confidence data.

Still, Wall Street was looking for more stimulus measures to buttress the economy. Analysts at Morgan Stanley said a further injection of cash was critical to the bank’s thesis for a “V”-shaped U.S. economic recovery.

The BlackRock Investment Institute downgraded U.S. equities to “neutral,” citing risks of fading fiscal stimulus, an extended epidemic as well as renewed U.S.-China trade tensions.

Although a $3 trillion aid bill was passed by the House of Representatives in May, the Republican-controlled Senate has not taken up the package and lawmakers are not expected to move toward another coronavirus bill until sometime in July.

Coty Inc (COTY.N) jumped 13.4% after the company said it would buy a 20% stake in Kim Kardashian West’s makeup brand for $200 million.

Advancing issues outnumbered declining ones on the NYSE by a 3.02-to-1 ratio; on Nasdaq, a 1.96-to-1 ratio favored advancers.

The S&P 500 posted 1 new 52-week highs and no new lows; the Nasdaq Composite recorded 53 new highs and 17 new lows.

Volume on U.S. exchanges was 10.57 billion shares, compared to the 13.54 billion average for the full session over the last 20 trading days.

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Wall Street ends lower as coronavirus surge prompts renewed restrictions

NEW YORK (Reuters) – Wall Street’s major indexes tumbled more than 2% on Friday as several U.S. states imposed business restrictions in response to a surge in coronavirus cases.

Some U.S. states that were spared the brunt of the initial coronavirus outbreak or moved early to lift restrictions are seeing a resurgence in new infections. On Friday, Texas and Florida ordered bars to close down again.

“You’re seeing a pretty dramatic increase in cases,” said Kevin Grogan, managing director of investment strategy at Buckingham Strategic Wealth in St. Louis. “If people start feeling again like it’s not safe to eat out or go shopping, that could have a really negative impact on the stock market.”

A Wall Street Journal report that the Phase 1 U.S.-China trade deal could be at risk placed additional pressure on U.S. stocks. According to that report, Chinese officials warned that “meddling” in Hong Kong and Taiwan could lead Beijing to back away from its commitment to purchase U.S. farm goods.

“It added another log into the risk aversion fire,” said Edward Moya, senior market analyst at OANDA in New York, of the report on China.

Among sectors, financial, communication services and energy shares outpaced the broader S&P 500 in declines. S&P 500 bank shares plummeted 6.1% after the Federal Reserve limited dividend payments and barred share repurchases until at least the fourth quarter following its annual stress test.

Renewed concerns over the novel coronavirus pandemic have threatened to derail a strong rally for Wall Street that has erased much of the S&P 500’s steep losses from March. The benchmark index ended below its 200-day moving average, an indicator of long-term momentum.

The uptick in coronavirus cases likely triggered a test of that technical level, said Jim Paulsen, chief investment strategist at The Leuthold Group in Minneapolis.

The Dow Jones Industrial Average fell 730.05 points, or 2.84%, to 25,015.55, the S&P 500 lost 74.71 points, or 2.42%, to 3,009.05 and the Nasdaq Composite dropped 259.78 points, or 2.59%, to 9,757.22.

For the week, the S&P 500 fell 2.87%, the Dow lost 3.31%, and the Nasdaq shed 1.87%.

Facebook Inc shares shed 8.3%, weighing the most on the S&P 500, after Unilever PLC and Verizon Communications Inc joined an advertising boycott that called out the social media giant for not doing enough to stop hate speech on its platforms.

Nike Inc shares dropped 7.6% as the footwear maker, hurt by store closures due to the pandemic, posted a surprise quarterly loss.

Gap Inc shares surged 18.8% after the retail chain entered a 10-year deal with rapper and fashion designer Kanye West to create a line of clothing under his Yeezy brand.

Friday also marked the reconstitution of the FTSE Russell indexes, including the large-cap Russell 1000 and small-cap Russell 2000. Daily trading volume is often among its highest levels of the year during the reconstitution, though volume this year has spiked on several occasions amid steep market sell-offs.

Volume on U.S. exchanges was 16.43 billion shares, compared to the 13.44 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 3.99-to-1 ratio; on Nasdaq, a 3.57-to-1 ratio favored decliners.

The S&P 500 posted five new 52-week highs and no new lows; the Nasdaq Composite recorded 59 new highs and 28 new lows.

(This story refiles to fix grammar in paragraph seven)

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Wall Street falls as Fed action weighs on bank stocks, virus cases surge

(Reuters) – Wall Street’s major indexes dropped on Friday as the United States set a new record for a one-day increase in coronavirus cases and bank stocks fell following the Federal Reserve’s move to cap shareholder payouts.

The S&P 500 banks sub-index .SPXBK declined 3.9% after the Fed limited dividend payments and barred share repurchases until at least the fourth quarter following its annual stress test.

In the previous session, banks stocks had powered Wall Street’s main indexes higher, helping them offset investor fears due to rising virus infections in several U.S. states, including Texas, Oregon and Utah.

Cases rose across the United States by at least 39,818 on Thursday. Texas, which has been at the forefront of easing restrictions, paused its reopening plans ater the state recorded its one of the biggest jumps in new infections.

The uptick in cases has also threatened to derail a strong rally for Wall Street that brought the S&P 500 within 9% of its February all-time high on the back of record government stimulus measures.

“There’s a fight in the market between folks who believe that the economic resurgence is unstoppable and those who believe that there is more trouble ahead,” said Christopher Grisanti, chief equity strategist at MAI Capital Management in Cleveland, Ohio.

“It’s more probable that the scenario is not as rosy as the market thinks.”

At 9:51 a.m. ET, the Dow Jones Industrial Average .DJI was down 282.16 points, or 1.10%, at 25,463.44, the S&P 500 .SPX was down 22.98 points, or 0.75%, at 3,060.78. The Nasdaq Composite .IXIC was down 83.15 points, or 0.83%, at 9,933.86.

Nike dropped 4.3% as the footwear maker posted reported a surprise quarterly loss hurt by store closures due to the pandemic.

Facebook Inc (FB.O) shed 3.8% after Verizon Communications Inc (VZ.N) joined an advertising boycott that called out the social media giant for not doing enough to stop hate speech on its platforms.

Data showed U.S. consumer spending rebounded by the most on record in May, but the gains are not likely to be sustainable, as income declined and expected to fall further as millions lose their unemployment checks starting next month.

Friday also marks the reconstitution of the FTSE Russell indexes, including large cap Russell 1000 .RUI and small cap Russell 2000 , that often marks one of the biggest trading volume days of the year.

Declining issues outnumbered advancers for a 2.96-to-1 ratio on the NYSE and for a 3.12-to-1 ratio on the Nasdaq.

The S&P index recorded four new 52-week highs and no new low, while the Nasdaq recorded 34 new highs and five new lows.

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Wall Street set to open lower as banks fall, virus cases surge

(Reuters) – Wall Street was set to open slightly lower on Friday as bank stocks fell following the Federal Reserve’s move to cap shareholder payouts and the United States set a new record for a one-day increase in coronavirus cases.

U.S. lenders Bank of America Corp (BAC.N), JPMorgan Chase & Co (JPM.N), Goldman Sachs (GS.N) fell between 1.8% and 4% after the Fed limited dividend payments and barred share repurchases until at least the fourth quarter following its annual stress test.

In the previous session, banks stocks had powered Wall Street’s main indexes higher, helping them offset investor fears due to rising virus infections in several U.S. states.

The uptick in cases has also threatened to derail a strong rally for Wall Street that brought the S&P 500 within 9% of its February all-time high on the back of record government stimulus measures.

“There’s a fight in the market between folks who believe that the economic resurgence is unstoppable and those who believe that there is more trouble ahead,” said Christopher Grisanti, chief equity strategist at MAI Capital Management in Cleveland, Ohio.

“It’s more probable that the scenario is not as rosy as the market thinks.”

At 8:35 a.m. ET, Dow e-minis 1YMcv1 were down 144 points, or 0.56%. S&P 500 e-minis EScv1 were down 6 points, or 0.2% and Nasdaq 100 e-minis NQcv1 were up 0.25 points, or flat.

Nike slipped 3.6%, the most among the 27 of 30 blue-chip Dow Jones Industrials .DJI constituents trading before the bell, as the footwear maker posted its first loss in more than two years hurt by store closures.

Facebook Inc (FB.O) fell 1.1% after Verizon Communications Inc (VZ.N) joined an advertising boycott that called out the social media giant for not doing enough to stop hate speech on its platforms.

A U.S. Commerce Department report showed personal income dropped 4.2% in May after surging 10.5% in April. Separately, a reading of core personal consumption expenditures price index edged up 0.1% last month after easing 0.4% in April.

Friday also marks the reconstitution of the FTSE Russell indexes, including large cap Russell 1000 .RUI and small cap Russell 2000 , that often marks one of the biggest trading volume days of the year.

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Wall Street ends choppy session higher as strength in banks offsets virus woes

New York (Reuters) – Wall Street’s main indexes closed higher in choppy trading on Thursday, with bank stocks soaring ahead of annual stress test results and helping to offset investor jitters over alarming increases in new coronavirus cases.

The recently battered S&P 500 banks sub-index led the gainers for the session after U.S. banking regulators eased rules and investors waited for results of the sector’s annual stress test, which helps determine dividend policies.

The bank index had fallen 19 percent from its recent high on June 5 to Wednesday’s lowest point. It closed up 3.6% on Thursday.

But investors remained nervous throughout the day as the number of new virus cases in U.S. states grew, especially in the West and South.

Texas Governor Greg Abbott said he was halting his state’s phased economic reopening in response to a jump in COVID-19 infections and hospitalizations.

And stocks wobbled temporarily late in the session after Apple Inc said it would close 14 stores in Florida again due to rising COVID-19 cases after other re-closures in Houston, Arizona, South Carolina, and North Carolina.

A flare-up in virus cases in recent days has taken some wind out of a Wall Street rally powered by hopes of a quick economic recovery and massive government stimulus efforts. However, the benchmark S&P 500 still closed less than 9% below its Feb. 19 record.

While bank stocks provided one of the biggest boosts on Thursday, Michael James, managing director of equity trading at Wedbush Securities in Los Angeles, said investors were buying the dip after a pullback in stocks on Wednesday.

“None of those issues that caused yesterday’s weakness were really resolved today,” said James. “You could argue that the market could be a fair amount lower. The reason we’re not is there is still some understanding that things are going to have a brighter ending at some point.”

The Dow Jones Industrial Average rose 299.66 points, or 1.18%, to 25,745.6, the S&P 500 gained 33.43 points, or 1.10%, to 3,083.76 and the Nasdaq Composite added 107.84 points, or 1.09%, to 10,017.00.

All the three major indexes had opened Thursday’s session lower after data showed the number of Americans filing claims for unemployment benefits fell less than expected last week, likely as hiring by reopening businesses is being partly offset by a second wave of layoffs.

But the S&P’s financial sector, up 2.7%, stayed strong for the session and was the S&P’s top percentage gainer. Earlier, regulators had unveiled two rules easing restrictions covering large banks with complex trading and investment portfolios..

The Federal Reserve was due to release results of annual bank stress tests after the markets close, potentially indicating how much flexibility banks will have to return capital to shareholders.

“The risk-reward bias favors a more positive bias into the results this evening because the sector has been such a laggard,” said Wedbush’s James.

The energy sector gained 1.9% as oil prices rose 2% on the day. [O/R] Defensive utilities was the weakest S&P sector with a 1.2% decline.

Walt Disney Co, down 0.63%, pared losses but still closed down for the second day in a row after it delayed the reopening of theme parks due to the health crisis. A report also said it was considering postponing the July 24 release of “Mulan.”

Boeing Co fell 1% as rival Airbus reached a crucial jetliner production target and smoothed recent industrial problems.

Advancing issues outnumbered declining ones on the NYSE by a 1.81-to-1 ratio; on Nasdaq, a 2.00-to-1 ratio favored advancers.

The S&P 500 posted five new 52-week highs and no new lows; the Nasdaq Composite recorded 63 new highs and eight new lows.

On U.S. exchanges 11.38 billion shares changed hands compared with the 13.32 billion average for the last 20 sessions.

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Wall Street finishes lower on rising virus cases, weak economic view

NEW YORK (Reuters) – Wall Street’s three major indexes on Wednesday suffered their biggest daily percentage drop in almost two weeks as a surge in U.S. coronavirus cases intensified fears of another round of government lockdowns and worsening economic damage.

Nasdaq, which had registered its fifth record closing high on Tuesday, snapped an eight-day wining streak, which was its longest since December 2019.

The session marked the biggest percentage decline for all three indexes, including a 2.6% drop for the S&P 500, since June 11 when the S&P fell 5.89%.

The United States has recorded the second-largest rise in infections since the health crisis began, with a flare-up of cases in states where restrictions meant to contain the disease were lifted early.

The governors of New York, New Jersey and Connecticut announced that visitors from states with high coronavirus infection rates must self-quarantine for 14 days on arrival.

“Today was finally the day markets came to terms with the fact that increasing COVID-19 cases could mean a slower recovery in the economy,” said Art Hogan, chief market strategist at National Securities in New York.

The pandemic appeared to be causing wider and deeper damage to economic activity than first thought. The IMF said it now expects global output to shrink by 4.9%, compared with a 3.0% contraction predicted in April.

Advanced economies have been particularly hard hit, with U.S. output now expected to shrink 8.0%, more than two percentage points worse than the April forecast.

Shares of U.S. airlines, resorts and cruise operators slumped as travel was hit hard by lockdowns. Royal Caribbean Cruises Ltd, Norwegian Cruise Line Holdings Ltd and Wynn Resorts all tumbled along with the NYSE Arca Airline index.

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Cruise operator Carnival Corp fell 11% as it also faced a Standard & Poor’s credit rating downgrade for its bonds to junk status.

The Dow Jones Industrial Average fell 710.16 points, or 2.72%, to 25,445.94, the S&P 500 lost 80.96 points, or 2.59%, to 3,050.33 and the Nasdaq Composite dropped 222.20 points, or 2.19%, to 9,909.17.

The S&P 500 finished the session about 10% under its Feb. 19 closing record high while the Dow Jones Industrials was about 14% from its Feb. 12 record close.

Wall Street’s fear gauge, the CBOE volatility index, closed 2.47 points higher at 33.84.

Before Wednesday’s sell-off, a slate of better-than-feared economic reports, easing lockdowns and massive stimulus measures had powered the Nasdaq to an all-time high and put the benchmark S&P 500 on track for its best quarterly performance since 1998.

“The market seemed pretty confident we were going to be in much better shape in 4-6 months from now. With the resurgence of cases, they’re starting to discount that,” said Shawn Cruz, senior manager for trader strategy at TD Ameritrade in Jersey City, New Jersey.

The biggest decliner among the 11 major S&P sub-sectors was energy, down 5.5%, as crude prices slumped on news of record storage and concerns about demand.

Utilities, down 0.9%, showed the smallest percentage decline as it is seen as a defensive sector with predictable revenue.

Dell Technologies Inc shares jumped 8.3% after a report said the company was considering spinning off its roughly $50 billion stake in cloud computing software maker VMware Inc. VMware rose 2.3%.

Declining issues outnumbered advancing ones on the NYSE by a 6.84-to-1 ratio; on Nasdaq, a 4.58-to-1 ratio favored decliners.

The S&P 500 posted 1 new 52-week highs and no new lows; the Nasdaq Composite recorded 44 new highs and 11 new lows.

On U.S. exchanges 13.35 billion shares changed hands compared with the 13.31 billion average for the last 20 sessions.

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Wall Street finishes lower on rising virus cases, weak economic view

NEW YORK (Reuters) – Wall Street’s three major indexes on Wednesday suffered their biggest daily percentage drop in almost two weeks as a surge in U.S. coronavirus cases intensified fears of another round of government lockdowns and worsening economic damage.

Nasdaq, which had registered its fifth record closing high on Tuesday, snapped an eight-day wining streak, which was its longest since December 2019.

The session marked the biggest percentage decline for all three indexes, including a 2.6% drop for the S&P 500, since June 11 when the S&P fell 5.89%.

The United States has recorded the second-largest rise in infections since the health crisis began, with a flare-up of cases in states where restrictions meant to contain the disease were lifted early.

The governors of New York, New Jersey and Connecticut announced that visitors from states with high coronavirus infection rates must self-quarantine for 14 days on arrival.

“Today was finally the day markets came to terms with the fact that increasing COVID-19 cases could mean a slower recovery in the economy,” said Art Hogan, chief market strategist at National Securities in New York.

The pandemic appeared to be causing wider and deeper damage to economic activity than first thought. The IMF said it now expects global output to shrink by 4.9%, compared with a 3.0% contraction predicted in April.

Advanced economies have been particularly hard hit, with U.S. output now expected to shrink 8.0%, more than two percentage points worse than the April forecast.

Shares of U.S. airlines, resorts and cruise operators slumped as travel was hit hard by lockdowns. Royal Caribbean Cruises Ltd, Norwegian Cruise Line Holdings Ltd and Wynn Resorts all tumbled along with the NYSE Arca Airline index.

Related Coverage

  • Instant View: Wall Street backpedals amid new virus fears, quarantines

Cruise operator Carnival Corp fell 11% as it also faced a Standard & Poor’s credit rating downgrade for its bonds to junk status.

The Dow Jones Industrial Average fell 710.16 points, or 2.72%, to 25,445.94, the S&P 500 lost 80.96 points, or 2.59%, to 3,050.33 and the Nasdaq Composite dropped 222.20 points, or 2.19%, to 9,909.17.

The S&P 500 finished the session about 10% under its Feb. 19 closing record high while the Dow Jones Industrials was about 14% from its Feb. 12 record close.

Wall Street’s fear gauge, the CBOE volatility index, closed 2.47 points higher at 33.84.

Before Wednesday’s sell-off, a slate of better-than-feared economic reports, easing lockdowns and massive stimulus measures had powered the Nasdaq to an all-time high and put the benchmark S&P 500 on track for its best quarterly performance since 1998.

“The market seemed pretty confident we were going to be in much better shape in 4-6 months from now. With the resurgence of cases, they’re starting to discount that,” said Shawn Cruz, senior manager for trader strategy at TD Ameritrade in Jersey City, New Jersey.

The biggest decliner among the 11 major S&P sub-sectors was energy, down 5.5%, as crude prices slumped on news of record storage and concerns about demand.

Utilities, down 0.9%, showed the smallest percentage decline as it is seen as a defensive sector with predictable revenue.

Dell Technologies Inc shares jumped 8.3% after a report said the company was considering spinning off its roughly $50 billion stake in cloud computing software maker VMware Inc. VMware rose 2.3%.

Declining issues outnumbered advancing ones on the NYSE by a 6.84-to-1 ratio; on Nasdaq, a 4.58-to-1 ratio favored decliners.

The S&P 500 posted 1 new 52-week highs and no new lows; the Nasdaq Composite recorded 44 new highs and 11 new lows.

On U.S. exchanges 13.35 billion shares changed hands compared with the 13.31 billion average for the last 20 sessions.

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